Thursday, May 26, 2016

Western Hurdles | Obstacles to Growth in Ghana

We hear a lot about Africa in the news and it never tends to be good. It’s undeniable that the continent has a plethora of difficulties, but this hasn’t been helped by its countries’ economies being shackled by Western policies to such an extent that it risks becoming an interminable vicious cycle. Economic difficulties only increase tension domestically, exacerbating underlying issues, that often lead to the troubles we see on the news.

A major aspect of what we’re trying to do with our project partner, TradeAID, in Bolgatanga on the ICS scheme is to help the craft people of Upper East region to gain access to the global market. While this is really helpful on an individual basis (the basket weavers have higher profits of up to 200% with international orders than local ones, for example) there are some things that make life difficult for entrepreneurs.

One major focus of ire in Ghana is the IMF loan given to the government to sort out its national debt. On the face of it a low-interest loan isn’t the worst thing in the world and it represents a necessary financial boost for an unpredictable economy. However, it has had severe repercussions, especially for young people.

This morning I met Richard, an ambitious dietician who has just completed a three-year master’s programme and was back in Bolgatanga to look for work. Despite being very gifted and knowledgeable about a range of issues, he explained to me that it was unlikely he would find a job as a dietician. Why? Because in exchange for the loan the IMF has put pressure on the government to reduce its wage bill, including that of the health service.

This means that, while more Ghanaians are in university than ever before, young people are struggling to get their foot in the door because organisations are reluctant to hire.

Other Western policies cause further damage to Ghana’s economy. A challenge particular to TradeAID is related to PayPal. Although it would be great to start an eCommerce arm of the website, PayPal has blacklisted Ghana from using its service due a history of fraud. This mainly occurred on an individual level in the 90s when the internet was first starting out. It has frustrated and infuriated us for the past few months that Ghana is still being punished for historic petty crimes (especially given the UK coverage of tax fraud in 2016).

Finally, there’s an element of protectionism in some parts of the West that keeps developing countries at arm’s length. Take a look at Ghanaian exports and you’ll see that one of the main crops is wheat. It is harvested in large quantities and at low cost meaning it should be a popular import for the West. But Western policy once again gets in the way.

The US government grants $20 billion dollars in subsidies to its farmers every year in order to keep them in business, with the EU doing similarly for its farmers. While this wins votes domestically, it cynically starves developing countries of much needed business in exchange for popularity, even though governments could save enormous amounts by importing its wheat and not handing out billions to inefficient farms.

Our projects in Ghana try to address that balance. We in Bolgatanga have to work our way around the PayPal problem by operating offline, accepting orders in bulk rather than individually. This has actually led to our project partner being better able to keep track of their orders so in that sense at least we have managed to turn an obstacle into a positive.

It’s amazing that a group of 12 young people from disparate backgrounds have come together to fight poverty, and much of the battle must be on an individual level; as ICS shows, bottom-up initiatives are crucial to change in developing countries . If this is the difference we can make now, imagine what the future holds when the West plays ball?

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